Stand off over £6m Herefordshire health service contract dispute resolved

THE county’s two key NHS care providers have a reached a deal over service funding after several months of stand-off.

Wye Valley NHS Trust (WVT) and Herefordshire Clinical Commissioning Group (CCG) confirmed this morning (Friday) an agreement on contractual funding without the need for formal arbitration.

Both successfully finalised talks on Tuesday – ahead of a deadline for arbitration - and needed time to analyse what had been agreed before issuing joint confirmation of a deal “acceptable to both parties.”

More than £6m was at stake with WVT, which delivers services, and the CCG, which commissions and pays for them, at odds over the correct funding of the community health services contract valued at £4.3m and four disputes relating to the application of the national tariff - a set of prices to help HCCG work with WVT on service provision.

WVT, HCCG, NHS England (NHSE) and the Trust Development Authority (TDA) have been locked into talks over recent months without reaching agreement.

Last Thursday, the WVT board was told that the outcome of the talks was crucial to the Trust’s 2015-15 budget that already projects a deficit of £9m.

At its meeting, the WVT board was told that the Trust was “not confident” that HCCG’s QIPP (Quality, Innovation, Productivity and Prevention) programme would deliver the reduction in activity it intends, so the Trust had to assume it can recover this “lost” income through contract over-performance – a risk of up to £3.2m.

The CCG wanted to reduce its contract with the Trust by £3.2m.

A CCG board meeting on Tuesday was told the ongoing contract discussions with the Trust represented a “major financial risk” with the potential for budgets being agreed over and above those identified in the draft budget.

The board was told that WVT had identified a “significant gap” within their plans, mainly surrounding the provision of community services.

With agreement reached, both WVT and the CCG are expected to file final budget submissions today (Friday).